BERGERAC SYSTEMS

112-MAYANK PANDEY 560-VINEET HEJIB

Pet diagnostics market Adoption of in house lab equipment Product OmniVue

Diagnostic instrument User friendly Virtually no training needed

OVERVIEW

Good quality and accuracy

THE PROCESS OF PRODUCTION

Instrument production was assembly line operation

Cartridge production was injection moulded plastic pieces

Challenge of exploring the opportunities Problems with suppliers

Little buying power Petrochemicals as key inputs Uncertain economic environment Capacity constraints

BUILD VS BUY ISSUES

Buy opportunity

Purchase prize = $5.75 per month

8 moulding presses Cycle time = 75 seconds 3 shifts and 5 days working a week Revenue accounted for = 50% Acquiring would redue overhead Pay back option = 5 years

Build opportunity

4 moulding presses New machine with cycle time = 70 second Machine uptime = 95% Savings = 57 cents per unit

Additional staff needed for training

Setup time = huge Payback time = 16 months

BUILD VS BUY CRITERIA (FROM RAVI VENKATESAN ARTICLE)

SOME ANALYSIS

parameter

Build

Buy
1143600 3675000 5390625 1759500 0 11968725

labour costs 1087000 Raw material cost 3560156 Net income = $6616000 Reagent costs 5390625 net overhead 1073400 consultation cost 90,000 Annual operating cost 11201181

parameter
cartridges generated cost / unit delivery cost net cost / unit current cost savings net savings @ 4687500 units net capital requirements Break even volume break even time @ 4687500 units

Build
4687500 2.389585 0 2.389585 2.96 0.570415 2673819 3607000 6323470 1.349007

Buy
4687500 2.553328 0.15 2.703328 2.96 0.256672 1203150 5750000 22373541 4.773022

SAVINGS AND OTHER COMPARISON

CONCLUSIONS & RECOMMENDATIONS

Resources would be easily gathered Families are strategic Investment could result in economical savings

Pay back period is lesser

Hiring and training would be more complex though Let it buy its cartridges Give proper training Recruit experienced personnel

THANK YOU